US construction starts fell 9% in June to a seasonally adjusted annual rate of $1 trillion, according to Dodge Construction Network. Nonresidential starts led the downturn, falling 14%. Nonbuilding starts fell 9%, and residential starts lost 4%
Year-to-date through June 2023, total construction starts were 5% below that of 2022. While residential and nonresidential starts were down 24% and 2%, respectively, nonbuilding starts gained 29%. For the 12 months ending June 2023, total construction starts were 9% higher than 2022. Nonbuilding starts were 34% higher, and nonresidential building starts gained 25%. However, on a 12-month rolling basis, residential starts posted a 17% decline overall.
“Construction starts are oscillating — up one month and down the next,” said Richard Branch, chief economist for Dodge Construction Network. “The presence, or absence, of mega-projects is a key influencer in this trend. Nevertheless, high-interest rates and tightening lending standards are leading to uncertainty among owners and developers, also creating hesitation among stakeholders, leading them to carefully assess whether projects will break ground. These conditions will persist through the remainder of the year — meaning little forward motion in construction starts.”
Nonbuilding construction slipped 9% in June to a seasonally adjusted annual rate of $317 billion. Despite a strong showing in May, utility/gas plants fell 43%, and highway and bridge starts dropped 22%. Conversely, environmental public works starts gained 1%, and miscellaneous nonbuilding starts more than doubled due to the start of a large stadium project. Year-to-date through June, nonbuilding starts gained 29%. Utility/gas plants rose 61%, and miscellaneous nonbuilding starts were up 60%. Highway and bridge starts also gained 19%, and environmental public works rose 14%.
For the 12 months ending June 2023, total nonbuilding starts were 34% higher than that of 2022. Utility/gas plant starts rose 62%, and miscellaneous nonbuilding starts were 45% higher. Highway and bridge starts were up 25%, and environmental public works rose 24% on a 12-month rolling sum basis.
The largest nonbuilding projects to break ground in June were the $2.6 billion Matterhorn Express Pipeline in Texas, the $1.4 billion Buffalo Bills stadium in Orchard Park, New York, and the $930 million Bissell & Lemay wastewater treatment plant in St. Louis, Missouri.
Nonresidential building starts shrank 14% in June to a seasonally adjusted annual rate of $348 billion following an aggressive growth in manufacturing starts in May. Commercial starts fell 6%, with gains in office and hotel offset by a pullback in warehousing and parking structures, while manufacturing starts lost 67%. Institutional starts gained 15% in June due to healthcare and airport terminal work. On a year-to-date basis through June, total nonresidential starts were 2% lower than that of 2022. Institutional starts gained 9%, while manufacturing and commercial starts fell 6% and 11%, respectively.
For the 12 months ending June 2023, total nonresidential building starts were 25% higher than that ending June 2022. Manufacturing starts were 76% higher, institutional starts improved 21%, and commercial starts gained 9%.
The largest nonresidential building projects to break ground in June were the $2.6 billion JetBlue Terminal 6 at JFK airport in Jamacia, New York, the $625 million first phase of the GlobiTech Semiconductor plant in Sherman, Texas, and a $558 million hospital tower at Strong Memorial Hospital in Rochester, New York.
Residential building starts fell 4% in June to a seasonally adjusted annual rate of $344 billion. Single-family starts gained 8%. Multifamily starts lost 23%. On a year-to-date basis through June 2023, total residential starts were down 24%. Single-family starts were 27% lower, and multifamily starts were down 17%.
For the 12 months ending in June 2023, residential starts were 17% lower than in 2022. Single-family starts were 26% lower, while multifamily starts were up 2% on a rolling 12-month basis.
The largest multifamily structures to break ground in June were the $500 million 1072 W Peachtree building in Atlanta, Georgia, the $450 million Pendry-One Ashley condo tower in Tampa, Florida, and the $345 million Merchant Building in Columbus, Ohio.
Regionally, total construction starts in June fell in all regions except the West and Northeast.
Watch Chief Economist Richard Branch discuss June Construction Starts here.
